Back Up Shoppers at the Front of the Line

Retailers’ concerns about shopper queues generally center on those last few at the back of the line and on the experience of those last few as they’re waiting. Now researchers at RWTH Aachen University and WHU, both in Germany, urge retailers to also take into account the experiences of those in front of a long line once they get the service of a salesperson or cashier. The finding is that these consumers feel pressured to transact their business promptly because of a sense of others breathing down their neck, and this results in less satisfying impressions of the store, the staff, and the merchandise. When this happens at the store checkout, the dangers are particularly great, since this becomes the customer’s last memory of the retailer.
     The researchers went on to determine that two techniques ease these negative effects:

• Have the salesperson or cashier encourage the consumer not to feel at all rushed in getting the help they want. This works because it places the responsibility for the extra time on the salesperson, removing the social pressure on the consumer. 
• Maintain distance between the waiting line and the location where service is being delivered. In the studies, this was accomplished by keeping the line out of sight of the service location. My store experience indicates to me that greater distance, even when sight lines are maintained, can work well. 

     Additional research-based tips for easing the irritation of all those in the queue:

• If you can see the end of the line, greet each person as they join, even if only with a brief smile and a nod. 
• Periodically say to those in line, “I apologize for the delay. I’ll be with you soon.” 
• As you welcome each new person coming to you, acknowledge that they’ve been waiting. 
• If the lines are unusually long, remark about a possible reason, saying, for example, “My goodness, people seem to really like today’s sale.” 
• Maintain quality internet access so people can pass the time with mobile devices. 

     When in a store queue, shoppers become highly vigilant. One reason is the extra stress caused by being in close physical proximity to people we don’t know. Another reason is to be sure social norms are respected, such as nobody butting into line and each person waiting about an equal amount of time. So the best way to handle queues is to keep those lines moving.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Acknowledge People Waiting in Line
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Observe Risks of Your Obsolescence

Satisfy your customers, but not completely, some might say. Consider the retail services category of matchmaking. Researchers at University of Pittsburgh, Carnegie Mellon University, and INSEAD claim there’s a fundamental conflict of interest between businesses like eHarmony and their clients: If the matchmaking is too good, members will cement a relationship and discontinue their paid subscriptions. A parallel conflict would be suspected in job-hunting sites. As soon as you find the perfect fit between you and an employer, you terminate use of the service.
     Another INSEAD research collaboration, this one with Boston Consulting Group, explores other examples of a product, service, or provider becoming obsolescent for a customer. Appliance retailers and residential real estate agents are no longer needed for an extended time once the purchase of the refrigerator or the home is completed. Customers for smoking cessation aids stop being customers if the product is sufficiently effective. Purchases of pureed baby food stop when the ultimate consumer gets older, regardless of how well the product fulfilled its objectives.
     The advice is to recognize the risks and plan to avoid the obsolescence.

• Broaden the range of interest in your services. Job search customers could be encouraged to continue their subscriptions in order to stay current on what’s available in order to plan their next career move. Matchmaking services can appeal to shoppers looking for a succession of dating companions rather than settling into a search for a marriage partner. Consumers from cultures accustomed to arranged marriages might be most comfortable with meeting a range of promising prospects from which a choice can be made. The Ashley Madison tag line—Having An Affair Made Easy—indicates there is even a market for matchmaking among those who are already married, although you might choose not to exploit that one. 
• Provide a progression path. Gerber welcomes its eaters who have outgrown pureed to move on to a line which encourages the use of utensils. Appliance retailers can offer bargain models. Misrepresenting the durability of items you sell is bad business. But offering low-priced versions which are not designed to last as long as the traditional models provides a path for economically challenged consumers to get started and then upgrade as their financial situation improves. 
• Encourage satisfied customers to recommend their friends to you and to recommend those friends recommend you to their friends. Weak links in referrals nicely augment the strong links. 

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Cap Off Profits with Endcap Impetus

Few among successful retailers ignore the selling appeal of endcaps—displays of products at the end of an aisle on a shelf or rack perpendicular to the aisle. In studies at University of South Australia, endcaps at the front of a store, facing the entrance or the checkout counters, uplifted sales by an average of 346%. Endcaps at the back of the store, facing the storage area or the building’s rear wall, uplifted sales by 416% on average. One explanation is that it’s easier to see products on endcaps than on aisle shelving.
     Tripling or quadrupling sales certainly enhances profitability, even considering that retailers commonly feature discounts on end-capped items. Actually, another explanation for the sales lift achieved from endcaps is that shoppers come to associate endcaps with good discounts and so pick out end-capped products because of subconscious habit. In other studies, the sales lift ranged from 23% to 1200%. Further, because only a small percentage of items can be displayed on endcaps in a typical store layout, a retailer can negotiate with suppliers to get slotting fee payments for endcap placement of products. This adds to the profitability.
     But those University of South Australia researchers were interested in the substantial difference between 346% and 416%. Why did rear endcaps lift sales more than did front endcaps? One reason is that the rear of a store is generally less crowded than is the front, so shoppers are more likely to linger at the back. But a more intriguing reason revealed itself when the researchers tracked down what led to the sales lift. For the front endcaps, it came mostly from increased purchases of the specific items that were on the endcaps. But for the rear endcaps, the sales uplift came largely from increased purchases of items on the aisle shelves adjacent to the endcaps. The rear endcaps were attention magnets, drawing people into the aisles.
     University of Minnesota studies indicate that you can increase this sales lift by featuring in the adjacent aisles items which are companions to those on the endcap and carry the same brand name. When a customer purchases an item carrying a specific brand name, the customer becomes more likely to prefer the same brand name when going on to select an accompanying item. Matching brand labels suggest to shoppers that the two products were specifically designed and tested to work well together.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Construe to Fit Comparative Price

A chocolate candy might be thought of concretely in terms of the appeal of its particular ingredients or abstractly in terms of how good eating it leads one to feel. An ad for a diamond pendant could use the tag line, “Flawless quality and pure color,” in order to appeal to concrete thinkers, or “Make it unforgettable,” to appeal to abstract thinkers.
     Researchers at University of British Columbia and Nanyang Technological University find that the comparative price of the item often influences whether you’re better off using concrete or abstract benefits statements. If the price is comparatively low for that product category, shoppers show greater preference for the item when hearing or seeing concrete statements. If the price is comparatively high, use abstract statements.
     To demonstrate this had to do more with the comparative price than with the price itself, the researchers placed one-dollar chocolates next to ten- dollar slabs of artisanal chocolate during certain hours at a candy store. During other hours, the one-dollar chocolates were placed next to a group of twenty-five cent Tootsie Rolls.
     Shoppers during the first set of hours were more likely to purchaser the one-dollar chocolates when a low-construal, concrete, message was used. The other shoppers showed greater purchase frequencies of the same style of chocolates when a high-construal, abstract, message had been used. Similar results were found in studies involving expressed preferences for energy drinks, electric toothbrushes, and diamond pendants.
     There are other considerations in whether to use concrete or abstract statements. With unfamiliar items, consumers are more likely to believe concrete than abstract benefits statements. Touching products stimulates sales more strongly with low construal levels.
     And there are methods other than benefits statements to mesh with the shopper’s construal level. Researchers at Ghent University discovered that shoppers are relatively more interested in concrete features when gazing down at the merchandise and relatively more interested in abstract claims when peering up.
     Consumers had been asked to state which of two printers they preferred. One printer was described as reliable and the other as being of high quality. Those consumers who needed to look down to see the printers favored the “reliable” printer on average. Those consumers who needed to look up tended to prefer the “high quality” printer.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Absorb for Family Firm Success

Absorptive capacity is essential for your family-run store to thrive. Studies at University of Castilla-La Mancha supported this conclusion by using an instrument to measure the four components of absorptive capacity as generally agreed on by business scientists. Here is my version of those four along with why they are especially important for the family-run enterprise:

• Acquisition. The business regularly exchanges information with others in the industry. This overcomes an inbreeding danger for the family-run store, in which management decisions are always made by the same select group. 
• Assimilation. Ideas for improving the business are continually communicated and critiqued. Otherwise, senior family members can mistakenly believe junior family members understand the reasons for decisions, and junior members can hesitate questioning flawed ideas for fear of disrupting family peace. 
• Transformation. The accumulated and critiqued information fuels innovation. One of the frequent upsides of a family-run business is stability, but without a strong transformation capability, the stability results in the business falling behind the marketplace. 
• Exploitation. The business tests out prototypes before undertaking full implementations. This component of absorptive capacity facilitates both the innovation and the opportunities for critiques. 

     In a sample of 1,045 family firms, those reliably practicing the four above showed greater sales growth, profit growth, and growth in market share. An entrepreneurial spirit also proved important to success, but it operated through absorptive capacity.
     Family-owned stores too often lack longevity. That reality transcends languages and cultures. Consider the English-language versions of these maxims:

• “Father merchant, son gentleman, grandson beggar” (Mexico) 
• “Rich father, noble son, poor grandson” (Brazil) 
• “From the stables to the stars and back to the stables” (Italy) 
• “Wealth never survives three generations” (China) 
• “Shirtsleeves to shirtsleeves in three generations” (U.S.) 

     Those were collected by investigators at Boston Consulting Group and Cambridge Advisors to Family Enterprise to flesh out the fact that only about one out of every ten privately-held businesses makes it through to the third generation.
     Family-run businesses have advantages. The loyalty among management members helps to persevere through the tough times. As long as the senior members cultivate a life outside the business, developing a succession plan is straightforward. The business projects an authentic sense of family to customers and prospective customers. According to research at University of Geneva, giving a sense of family is useful for retailer-to-business relationships, too.
     By incorporating absorptive capacity, your family-run business can realize these advantages for the long-term.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Like Parent, Like Child, Like Buying

When approving purchase of a prom dress, is the mother or the father of the intended wearer likely to set a higher acceptable budget? Most retailers I’ve asked say it’s the father, but the research-based answer is not so straightforward.
     Researchers at State University of New York-Oneonta, Rutgers University, and University of Minnesota asked parents visiting a zoo to take a short survey about the zoo. Parents were selected to participate only if they were visiting the zoo with at least one child of each sex in tow. As compensation for completing the survey, the parent was offered a chance to win a backpack, small suitcase, or similar item. The parent could choose to enter the drawing for either the pink items from the “Girl’s Prize Pack” or the blue items from the “Boy’s Prize Pack.”
     It turned out that 76% of the mothers chose the Girl’s Prize Pack and 87% of the fathers chose the Boy’s Prize Pack. In a few other studies, too, these researchers found that parents favored expenditures on the same gendered child and that the explanation seems to be greater psychological identification with the same-sex child. There was also evidence that the pattern of preferences extends beyond parent-child pairs. Therefore aunts may be more comfortable making purchases for nieces, and uncles for nephews.
     When families shop together with you, it’s useful for you to identify the retail influencers. However, an important limit on the value of this set of studies is that the participants were required to choose between an expenditure either on a boy or on a girl. In many circumstances, a parent can choose to purchase items for each of their children. In these circumstances, adults could endeavor to spread the expenditures equitably. It is when the extent of resources feels limited, such as when the retailer wants to upsell, that it pays off to sell through the same sex parent.
     Also, in tight economic times, both parents become highly receptive to spending more retail dollars on daughters than on sons. In any case, none of this should be used in a way which would alienate the father of the daughter or the mother of the son. To show how you like having the parent buy from you for the child, make clear that you respect the preferences each parent expresses.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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